Institutional Demand for Ether Cools as Investors Shift to US Treasurys

[johnblockbuster]

Institutional appetite for Ether (ETH) is showing signs of fatigue as capital rotates toward short-term US government bonds. US-listed Ether ETFs recorded $242 million in net outflows over two days, reversing earlier inflows that followed ETH’s rebound from its $1,744 low. At the same time, yields on the US 2-year Treasury have dropped to 3.42%, reflecting growing expectations of Federal Reserve rate cuts in 2026 and increased demand for safer assets.

High interest rates are also making Ether’s 2.9% staking yield less compelling for long-term holders, especially with the Fed’s target rate sitting around 3.5%. Adding to the pressure, ETH supply is expanding at an annualized rate of 0.8%. Combined with a 38% price decline over the past month, these factors have weighed on sentiment and raised concerns about Ethereum’s near-term competitiveness against faster, more scalable blockchain networks.

[chainsniff]

$242m outflow in 2 days sounds bad but it’s less than 2% of etf assets, chill